'Black Friday:' Car Buyers Get Best Deals of the Year

November 22, 2009
As the old saying goes, hope springs eternal... in the minds of some car marketers. It happens every year about this time.

About two weeks before Thanksgiving this year almost exactly two weeks stores begin giving hints of the great deals they'll be giving on Black Friday, the day after Turkey Day and traditionally the busiest shopping day of the year.

It is the busiest day, depending on the type of business you are in. For instance, you can bet that with he specials already announced by Target ($3 coffee makers) and planned specials at Walmart and with stores planning special early openings, that people will be waiting for the doors to fly open, no matter what time of day or morning it may be and they will trample anything or anyone in the way of their quest to get the bargains of the day.

Note the stores, though, they are retail stores Target, Kohl's, Walmart, Best Buy. Do you see any car dealerships in this list? You probably don't see any and it is no oversight, either. Yes, car dealers do have big expectations for Black Friday, but those expectations never seem to work out.

Based on our own five-year experience in Internet and retail car sales, this area of the economy seems to be the one that is immune to the Black Friday syndrome. It is true that we expected big things to happen the day after Thanksgiving, but, most of the day we stood around looking at each other or working the phones to bring people in. There was very little walk-in traffic.

It really does make sense. People are conditioned to think of the day after Thanksgiving as the kickoff of the Christmas buying season, a time when people buy gifts for their kids, mothers, fathers, aunts or uncles. Those gifts are things like electric razors or neckties or new shirts or the latest electronic gizmo, but not usually a car, unless it's going to be a very special Christmas for a person.

So, while people are buying sales analysts are already forecasting a better buying season this year than last they are not thinking about cars.

Here's an exact case in point. During five years at a local Honda dealership, doing a variety of managerial and sales jobs, we found that the malls that blanketed the area and that were as close as about 500 yards from the front door were busy from special opening times to their special closing times as we stared at a yard full of cars.

Expecting better things the next day, we all came in fired up and ready to go, but, other than the occasional shopper or tire kicker, we pretty much spent the day trying to pull people in via phones or emails. By the next day of the weekend Sunday we were starting to see traffic because the frenzied retail activity at the malls was waning and people were getting back to their normal patterns. Analysts went back several years and studied the discounts buyers were able to get before Black Friday, on the day itself and just after and they found some interesting patterns.

In general, says Jesse Toprack, an analyst with Truecar.com, they found that this Black Friday buyers are in the driver's seat, so to speak, receiving the best discounts of the year. For example, he noted, that buyers can expect a discount of about 7.5 percent from sticker on Black Friday, a figure that's up 1.5 percent from the day before and the day after.

So, some of the discount steam does hold through the weekend as the analyst noted the rest of the year discounts ran about 4.7 percent less than sticker.

He also noted that the car business is unique in that most of the time a retail buyer will walk into a store and know what he will be paying, while the final price of a car isn't set until after negotiations are finished (some negotiation sessions can run for hours, too).

Toprack noted that he expected the cars with the biggest discounts to be:

  • The 2009 Suzuki SX-4 at 28 percent

  • The Nissan Titan (pickup) and Ford F-150 at 26 percent

  • The Hyundai Sonata at 20 percent

Some dealers, CNN reported, are likely to offer even deeper discounts to try and get in on some of the Black Friday feeding frenzy (already standard retailers like Target are planning to offer $3 coffeemakers and the like).

Brian Benstock, general manager of New York City's Paragon Honda, told CNN that there's a lot of noise in the market that day (Black Friday) and we have to stand out. So, he's planning to have bike riders, dressed in gorilla suits, ride over to the local Best Buy wearing posterboard advertising that says there's a huge car sale just down the street.

They will also be doing a huge $5-a-day Civic ad promotion on TV and radio. The deal works out like this $1,999 down and a $149 per month payment, which works out to just about $5-a-day. It's an interesting strategy.

Even normally staid car dealers like Cuyahoga Falls, Ohio's Cascade Auto Group, will be running full page ads in the local newspaper on the two days after Thanksgiving to try to cash in on more of the Black Friday business. Those are the only days we buy full page ads in the paper, Michelle Primm, managing partner of the dealership group. She noted they did gain business on Black Friday.

Her comment varies with our own experience as well as that of Toprack who noted that average traffic doesn't particularly increase that day.

Dealerships always spend a lot of money on marketing for that day, he noted, but for some reason, it's not a particularly big day for car shopping.

This year Black Friday is falling on an especially important weekend for the car business as it is the last weekend of the month. This is the weekend in any month when dealers try to pull every deal they can in through the door as they try to make their sales forecasts. It's really the best time of month for buyers to be in the market because dealers will go a lot further trying to pull in deals.

Not planning to play the Black Friday market game is Premium Nissan of New Rochelle, NY. Bob Goldberg, general manager, of the Nissan dealership said that Black Friday isn't anything special for them. Every day is important, he emphasized, I don't consider it different from any other day.

He also noted that since it is also the end of the month they are trying to close as many deals as possible before the month ends since this also directly impacts their model mix and sales quotas set for them by the factory.

One other piece adding to the pressure dealers are feeling is that as they enter December with unsold 2009 inventory they want to move it out because once the calendar turns to 2010, the 2009s are last year's models.

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